On Friday, the Legislature passed the state budget and, while I don’t want to sound like a crank, I have to ask: Really? This is how we do things in Sacramento? This is how we govern the nation’s most populous state? This is how we pass the budget – the single most important piece of legislation we’ll consider all year?

I serve on the Budget Committee and thought we had scraped the bottom of the procedural barrel last year. The committee hearing on that final budget lasted only about 45 minutes before the committee chairman cut off questioning to take a vote so that Democratic members of the committee could “catch airplanes.”

But we hadn’t hit bottom. This year, incredibly, the process was worse.

For example, the Budget Committee never even held a hearing and vote on the budget we passed on Friday, so I guess last year’s 45 minutes wasn’t bad. Instead, we had an “informational” presentation of a budget “framework.” In some news reports, Sacramento’s ruling Democrats called it a “concept” for the budget. In any event, there was no vote, even on the “concept” for this year’s budget. Moreover, the language of the budget… Read More

Rather than deal with reality, the Legislature has once again sent a fantasy budget to the Governor.

This fantasy budget foolishly assumes overtaxed Californians will vote this November to send even more of their hard-earned dollars to Sacramento.

When voters approved Proposition 25, they didn’t anticipate it would allow one party to make all major budget decisions in secret. Not only were Republicans shut out of the process, but so was the public.

Rather than make real reforms to increase private sector paychecks, this budget plan relies on taxes, borrowing and gimmicks to keep legislators’ paychecks flowing.

The Governor should veto this budget, scrap his proposed $50 billion tax hike and propose a new plan that requires government to live within its means.… Read More

Too Big to Fail: There is a lot of talk these days about the $3 billion loss at JP Morgan Chase. There is a lot of hand-wringing, concern, and investigation into what happened. We are asked about it on Capitol Hill, we have an opinion, and we all care about it. And, that is the problem. We shouldn’t have to care.

The only reason we are all in a tizzy over this is because JP Morgan is too big to fail. If Apple announced it lost $3 billion tomorrow, the shareholders, Wall Street and some trial lawyers would care, but it wouldn’t be any of Washington’s concern. That’s the way it should work with private companies. They take risks to make money. Sometimes you win and sometimes you lose.

Dodd-Frank did not fix this problem for the banks. Arguably, a provision in Dodd-Frank was part of the cause of the JP Morgan loss. Dodd-Frank requires disclosure of trading that was previously private. Hedge funds saw JP Morgan taking big positions (which just a few years ago would not have been made public) and decided to play the other side of the trade. The hedge funds won and JP Morgan lost. However, in this case, we all lost. That’s why… Read More

Episode VII – Education: In 1979, President Jimmy Carter created the Federal Department of Education. He did it to make the quality of education in this country better. This year, that department will have an administrative budget of $69 billion. That does not include the roughly $19 billion in federal dollars we will spend on education entitlements like Pell Grants and student loans.

The question is simple: Is American education better now than it was in 1979? Has spending trillions of federal dollars over the last 33 years led to America’s students consistently receiving a superior level of education?

The answer is painfully obvious. NO! So, why are we still trying to do what has failed for over 30 years expecting to achieve positive results?!

Sorry. I’ll calm down now. I have included education in this “Fix It” series on how to jump start two new decades of American hegemony, growth and prosperity because, like infrastructure, a strong education system is a prerequisite to growth and prosperity. So then, what is the state of education in America? In order to analyze our system, we have to break education into two… Read More

There’s a very important day this week — a day even more significant than when your taxes are due. In the state of California, Tax Freedom Day finally arrives on April 20.

Calculated annually by the Tax Foundation, Tax Freedom Day is the day on which the average Californian has finished earning enough money to pay all of his or her federal, state and local taxes this year.

So, congratulations. Just a mere 110 days into the year (not counting Feb. 29), you can finally start working for yourself instead of the government.

But before you break out the champagne, note the following:

Tax Freedom Day is four days later than last year. It would have been even later had the Governor and Legislature succeeded in their efforts to raise car taxes, income taxes and sales taxes. Californians must work longer for the government than residents of other states. The average American achieves tax freedom three days earlier than the average Californian. That’s one reason many workers leave our state as soon as they retire. If taxes were raised high enough to pay for all government spending, California’s Tax Freedom Day … Read More

I’m pleased to report that Senator Bob Dutton is stepping forward to fight for California consumers who are sick of high gas prices. Lawmakers like to complain about high gas prices. Now they have a chance to do something to help.

The legislation, which I am sponsoring, will cap the state excise tax on gasoline at 35.7 cents and limit sales tax to the first $4.00 per gallon of gasoline. It would also cap diesel taxes at their current levels.

Most Californians don’t realize they’re already paying about $10 in tax each time they fill up their gas tank. Without a cap, that number could get even worse.

Should the average annual fuel price rises just one dollar—from $4 to $5 per gallon—the typical California consumer would be forced to pay 8 cents more in taxes per gallon. For most consumers this would translate into a $1 or more in additional tax for each tank of gas.

As a whole, California consumers would be burdened $1.4 billion more in gas taxes each year – on top of the nearly $7 billion in taxes they are already paying.

According to the… Read More

It’s budget week here in Washington.

That means we are debating the budget for the upcoming fiscal year. There are proposals and amendments and such.

I’ve linked a 5 minute video clip of a response I gave to another (sigh) proposal to “tax the rich more” to this post. I received a number of accolades on this speech, including many from Democrats. I hope you enjoy it.

By the way, the amendment was defeated.

Click HERE to watch my Budget Committee remarks.… Read More

Today I released a dynamic analysis by the Board of Equalization showing that the Governor’s proposed sales tax increase will cost California jobs.

According to the analysis, a higher sales tax rate will take money out of the pockets of working Californians, destroying more than 23,000 jobs and $267 million in business investment.

These projected job losses are equivalent to every worker in a medium-sized California city like Glendora or West Sacramento losing their jobs.

When considering tax increases, policymakers often rely on static analyses that ignore behavioral changes by consumers and business owners. A dynamic analysis estimates the likely behavioral changes that could result from a higher tax rate.

The BOE analysis projects that nearly all of the proposed sales tax increase would be passed along to consumers. The state would receive $222 million less in revenues than projected by a static analysis, an 8% loss in potential revenue.

Since July of last year, lower tax rates have enabled Californians to keep more of their hard-earned dollars, and our economy is… Read More